It still may take three years, but Tennessee cooperatives could begin to see a return of unclaimed capital credits sooner than expected.
The Tennessee General Assembly passed the unclaimed property bill earlier this year, which reduces the amount of time the Department of Treasury will hold unclaimed funds before they are returned.
Unclaimed property was once held indefinitely, but cooperatives can now reclaim capital credit funds. After three years of being unclaimed, cooperatives can ask the state’s Unclaimed Property Division for those funds back and use toward their general fund or for other purposes. Of course, if a member is located and the capital credit is claimed, no matter how long it’s been, the cooperative will return the money to the member.
TNBA Executive Director Levoy Knowles says this is a big win for cooperatives, who must send unclaimed funds to the state when a member has moved away or can’t be located.
“It could be several thousand dollars,” he says. “Now, the state must return funds that have not been claimed after three years.”
The unclaimed property bill is a revision to the Tennessee escheatment law. In addition to reducing the mandated dormancy period for many property types, other changes include dormancy trigger rules and the introduction of new provisions for specific property types — including health savings accounts, custodial accounts and stored value cards.
According to the Tennessee Department of Treasury, the state currently has more than $976 million of unclaimed funds. In addition to cooperative capital gains, this includes money owed to consumers from banks, credit unions, insurance companies and the government.
Knowles says there is no statute of limitations on unclaimed funds.
Visit the Tennessee Department of Treasury to learn more about unclaimed property.